Counterfeit semiconductors: Too frequent a problem to tolerate

One of the fastest-growing crimes the FBI battles today is the counterfeiting of electronic components.

Every year the FBI publishes a Uniform Crime Report that defines crime rates by state, classification of crime, and demographics; however, this report does not take into account one crime that is fast growing, very difficult to detect and stop, and causes increasingly more damage over a wide range of industries every day all over the world.

The crime is the counterfeiting of electronic components.

To better define the extent of counterfeiting in the United States, the Department of Commerce recently issued a report that states that the counterfeiting of electronic components is a serious and widespread problem: the number of electronics counterfeit incidents increased more than 110% from 2005 to 2008, and it is still growing. This is a result of the increasing sophistication in production and marketing efforts.

Added to blatantly counterfeit devices are devices that become damaged as they flow through the hands of unauthorized dealers who cannot provide traceability, accountability, adequate inventory practices, or complete device testing and verification.

Counterfeiting's many facesThere are many forms of counterfeiting.

Total counterfeiting occurs when an unauthorized source manufactures a device in its totality.

Semiconductor “skimming” happens when manufacturing subcontractors produce unauthorized over-runs that they then sell to unauthorized distributors that may not have the resources to properly store or test the semiconductors so that integrity can be guaranteed.

Another tactic is reclamation of components from used equipment that has been discarded – counterfeiters strip out the semiconductors, then repackage and sell them to unsuspecting OEMs. Some counterfeiters even take the time to re-brand a used semiconductor with new logos and part numbers.

The illegitimate devices can be so accurate in appearance that, without comprehensive testing, engineers have no way of knowing that they are using substandard devices. Also, fraudulent certifications and documentation stating that devices are RoHS-compliant can be forged, making these substandard devices more difficult to identify.

Tough consequencesOriginal Equipment Manufacturers (OEMs), desperate for critical components because they haven’t planned ahead, often unknowingly procure counterfeit semiconductors by turning to unreliable sources in a time of panic. Lower pricing and convenient shipping schedules offered by unauthorized sources may seem attractive; however, substandard parts can be super expensive in the long run because there is no guarantee of quality, performance, or reliability. Counterfeit and substandard semiconductors consistently cause equipment and product failures.

Every manufacturer dreads the loss of revenue caused by downtime, as well as the loss of reputation caused by customer dissatisfaction. In the worst-case scenario, substandard parts can cause personal injury to production personnel and product end users.

In critical-use applications such as military, transportation, and health, consequences can be dire.

Forewarned is forearmedCustomers who purchase semiconductors through unauthorized sources are more likely to procure counterfeit or substandard devices. Semiconductors that are not supplied directly from the original manufacturer or through authorized distribution channels should be subjected to the fullest extent of original-manufacturer-approved testing to ensure quality and performance characteristics.

Rochester Electronics, a company that is authorized by over 60 top semiconductor manufacturers to provide continuing product and service to their customers, has implemented stringent quality control procedures that include scheduled device inspections; 100% traceability of procured devices; 100% guarantee of all products and services; and state-of-the-art, environmentally controlled storage facilities to assure proper storage.

The only way to guarantee the procurement of genuine semiconductor devices is to buy directly from the original manufacturer or its authorized distributors. The implementation of strict purchasing practices is the only way to protect against counterfeit components.

(George Karalias is director of marketing and communications for Rochester Electronics, headquartered in Newburyport, Mass.)

Dan, point taken, however, this is a guest blog rather than a news story. And while we work hard to make sure that even blogs are minimally self-serving, they are written from a perspective...in this case, Rochester's.
Your comment, though, makes me think we have to do a better job of delineating the difference between a news story and a contributed article.

Am I the only one who notices that this is not a "news article" but a blatant advertisement for a distributor?
When you get to the last two paragraphes you finally notice that you've been reading the print version of an infomercial.

"Another tactic is reclamation of components from used equipment that has been discarded – counterfeiters strip out the semiconductors, then repackage and sell them to unsuspecting OEMs."
This was a problem at a place where I used to work. They would buy hard-to-get FPGAs from these shifty suppliers. Only problem was these FPGAs were one-time-only programmable, and had already been programmed.